The government of Sri Lanka issued the following news release:
Sri Lanka has been noted as a top emerging hotel and resort market in Asia at a premier hotel investment conference held recently in Hong Kong.
At a general session on ‘Investment Outlook’ of the 23rd Annual Hotel Investment Conference Asia Pacific held in Hong Kong from October 10-12, panelists have identified Sri Lanka and Myanmar as the top emerging hotel and resort markets in Asia.
According to the panelists Sri Lanka is gaining momentum after the three-decade long civil war kept hotel development at bay for many years.
Kevin Wallace, president and CEO of Dubai, United Arab Emirates-based JA Resorts and Hotels, has specially noted Sri Lanka’s pluses for investment as a tourism destination.
He has told the panelists that Sri Lanka has a transparent system with laws in place for businesses, HotelNewsNow.com,a website for leisure industry said.
“You have the laws in place there, you have the land registry. You have opportunities along the coasts,” Wallace has said.
He has said that although there was an early “gold rush” by developers, there are still opportunities to acquire land and build first-class hotels.
Wallace has further noted that Sri Lanka has very good local contractors investors can work with, a functioning banking system, and relatively cheap land.
“Whoever goes in there and builds a state of the art, contemporary 4-star resort, even 3-star, will certainly do well over the next three to five years,” he has asserted.
The panelists also pointed out certain challenges overcome for hotel companies looking to enter Sri Lanka. Suchad Chiaranussati, managing director of SC Capital Partners, has said that the lack of highways is one of Sri Lanka’s major obstacles.
“If you want to reach the level of 8, 9, 10 million international visitors, you must have proper airport, proper highways, proper roads. Sri Lanka has a long way to go, but I do believe the country has a lot of potential,” Chiaranussati has told the forum.
Wallace has said that Sri Lanka is developing the highway system, particularly on the west coast but connecting the east and west coasts with highways must be a priority.
He has pointed out that the first major international resort being built in Pasikuda on the east coast, will have to rely on sea planes from the international airport because travelers who experience a 10-hour flight from Europe to Sri Lanka will not want to endure a five- or six-hour road trip from the airport to the east coast.
Comparing Sri Lanka to Thailand, where around 20 million tourists visit annually, Wallace has said that is hitting a ceiling with accommodation capacities and limitations on infrastructure.
“There are issues with existing room stock, there are issues with infrastructure. They thought by 2015 they’d be at 2.5 million tourists, but it costs several billion dollars to build those rooms; you have to mobilize the capital markets, equity, debt and so on,” Wallace said.
Another panelist has pointed out that the biggest challenge for Sri Lanka, is liquidity, especially when considering an exit strategy.
Andrew Heithersay, international director for LaSalle Investment Management, has said that there needs to be more than just domestic capital to take the investor out of an investment.
Wallace has added that domestic investors must invest more “to give foreign investors more confidence to get the international banks lending there again.”